On July 3, BlingNation closed an $8M round A, of which $6.3M was funded by Lightspeed. The company focuses on offering contactless payment options for community banks, at lower rates than Visa/MC. Their products include the BlingTag sticker that is attached to the mobile phone, the BlingTag Reader wireless POS terminal and BlingLink, a wireless payment platform.

BlingNation represents a larger series of trends in the payment space, namely the:

  • Emergence of Mobile as a form of payment
  • Increased activity on non-V/MC/AXP/Discover Networks
  • Enhanced use of Debit over Credit, particularly for smaller purchases

The secret sauce of BlingNation is the synergy created by a local payment network for the suffering local banks, local merchants eager to lower fees, and increased interest in security and simple payment forms for consumers.

As we all know, the consolidation of banks has been rampant in recent years, although the recent crisis may have prominently proven the wrongheadedness of this model (consolidating risk without managing risk, leads to larger riskier operations). The BlingNation option will certainly appeal to these folks, who have been playing by the Visa/MC rules for far too long, giving away their valuable transaction revenues, despite their active participation in local merchant acquisition, local business finance, etc. They will most likely promote this option heavily to all their customers.

As for local merchants, they too have been suffering against larger retail chains, mostly due to price. In some cases, margins are so tight that the impact of higher transaction fees can make the difference between staying in business and a "Going out of Business sale". They will likely all applaud this option, particularly because Visa/MC are likely not willing/able to combat alternative payment options (in lieu of V/MCs lost battles with Amex and Discover regarding issuing banks and merchant acquisition). They will likely promote this payment option in the same way they "nudge" people away from Amex or to Singature Debit.

As for the consumer, the battle will be won and lost on their acceptance. As mentioned in a prior post, contactless payment is certainly becoming more mainstream. However, its a bit of a stretch to get consumers to add a sticker to their mobile phone, connect it to an account, and use it at the POS. Not necessarily impossible - but it will be the key issue that BlingNation must solve.

Congrats to the Investors - It looks like a fairly shrewd investment...